Appropriateness Assessment
1. What is an Appropriateness Assessment?
The Markets in Financial Instruments Directive 2014/65/EU established that when providing financial services, FXCM ("we") must request information from the client ("you") in relation to your knowledge and experience in the specific type of products and services offered, as well as respond to the knowledge quiz. In order to meet this obligation, we emphasize the importance that you provide up-to-date, accurate and complete information to enable us to act in your best interest. We will then assess whether the product or service is appropriate for you. This is referred to as "Appropriateness Assessment".
2. What happens in an Appropriateness Assessment?
You will be requested to answer questions about the financial instruments that we offer. Based on your answers, we will assess whether you have the necessary knowledge and experience in order to understand the nature and risks of the products and services.
You will be informed if, on the basis of the Appropriateness Assessment, the services or products offered by us are considered inappropriate for you.
3. What if I do not want to undergo an Appropriateness Assessment?
All retail clients are subject to an Appropriateness Assessment in relation to trading complex financial instruments. A professional client is presumed to have the knowledge and experience required to understand the risk and is therefore able to trade all instruments.
4. What type of clients undergo the Appropriateness Assessment?
Where you have been classified as a retail client and your investment services relate to complex financial instruments (other than in relation to investment advice and/or portfolio management), you will be required to complete an Appropriateness Assessment.
A professional client is presumed to have the knowledge and experience required to understand the risk related to the financial instruments in which she or he is a professional and therefore does not undergo Appropriateness Assessment in relation to such instruments.
5. What are complex financial instruments?
This term refers to financial instruments that are classified as complex under MiFID II, taking into account factors such as the instrument's structure and risk.
6. What happens if I have traded the same financial instrument previously but through a different investment firm/ financial institution?
FXCM is required to verify that you have sufficient knowledge and experience in terms of the financial instrument you wish to trade. Therefore you will have to undergo an Appropriateness Assessment.
7. Do I need to repeat the Appropriates Assessment every time I buy a financial instrument?
No, you only need to undergo an Appropriateness Assessment during at the onboarding stage. We may reassess your Knowledge and Experience on a periodic basis.
8. When do I have to notify FXCM about changes in knowledge and experience?
As part of your ongoing relationship with FXCM, whenever there is a change or update concerning the information provided, you have to inform us. Especially when the change or update is related to your knowledge and experience.